When global investors have grown accustomed to classifying Bitcoin as a high-risk asset, the Middle East conflict at the start of 2026 is upending that framework. In its latest client memo, crypto asset manager Bitwise offers a thought-provoking perspective: Geopolitical tensions aren’t a headwind for Bitcoin—they’re a catalyst for its value. The data behind this assertion is striking: Since the US-Israel joint airstrike on Iran on February 28, Bitcoin has surged roughly 12%, while the S&P 500 has slipped about 1%, and traditional safe haven gold has dropped nearly 10%.
Bitwise CIO Matt Hougan and Head of Research Ryan Rasmussen state bluntly in the memo, "Chaos is a ladder." Borrowed from a popular TV series, this phrase illustrates how cracks in the global financial system are turning non-sovereign, neutral assets like Bitcoin into value accelerators.
A Memo That Captured Market Attention
On April 14, 2026, Bitwise released a memo co-authored by CIO Matt Hougan and Head of Research Ryan Rasmussen. The core argument is clear and direct: Bitcoin’s recent strength isn’t a contradiction of risk-off sentiment—it’s a direct result of geopolitical conflict.
Titled "Chaos is a Ladder," the memo directly addresses two common market views: first, that "geopolitics are irrelevant to Bitcoin," and second, that "war-induced money printing is a long-term boon for Bitcoin." Bitwise explicitly rejects both, arguing that Bitcoin’s performance in this crisis is rooted in the structural fragmentation of the global financial system.
According to Gate market data, as of April 15, 2026, the price of Bitcoin stood at $74,234.1, down 0.15% over 24 hours, with a market cap of approximately $1.33 trillion and a market dominance of 55.27%. Since the outbreak of conflict in late February, Bitcoin’s price initially plunged—dropping to around $63,500 on the day hostilities began—then steadily rebounded over the following weeks, climbing above $74,000 by mid-April.
From "Black Swan" to "New Normal"
February 28, 2026: The US and Israel launch a joint airstrike on Iran. According to CCTV News, President Trump announced the military action aimed to "destroy Iran’s security system" and "completely wipe out the Iranian navy." On the day of the strike, the price of Bitcoin plunged about 6%, briefly falling below $64,000. Liquidations across the market approached $500 million, with over 150,000 traders affected.
March 2026: Markets enter a period of extreme volatility. International oil prices soar roughly 50% in a month, reaching as high as $107 per barrel. Traditional safe havens like gold and silver experience a "free fall"—gold tumbles from a record high of about $5,600 per ounce to near $4,000. After an initial wave of panic selling, Bitcoin begins a gradual rebound.
April 6, 2026: Bitcoin briefly breaks above $73,000, but gives back gains after US-Iran negotiations collapse and President Trump announces a blockade of the Strait of Hormuz.
April 9, 2026: According to the Financial Times, a spokesperson for Iran’s Oil, Gas, and Petrochemical Products Exporters’ Union announces that Iran will charge a $1 per barrel transit fee for tankers passing through the Strait of Hormuz, payable in Bitcoin. For a fully loaded supertanker, the fee could reach as high as $2 million per passage. This marks a key turning point in the crisis.
April 13, 2026: Bitcoin hits resistance around $74,000 before pulling back, but remains up about 12% from pre-conflict levels.
April 14, 2026: Bitwise publishes its memo, systematically explaining the core logic behind Bitcoin’s divergent performance during the geopolitical crisis.
The sequence of events reveals a clear causal chain: "Shock—Divergence—Reshaping."
In the first stage, the outbreak of conflict triggers broad panic selling. As a 24/7, highly liquid asset, Bitcoin becomes a primary outlet for quickly hedging geopolitical risk, resulting in sharp short-term declines. With traditional markets closed, Bitcoin leads in risk repricing.
In the second stage, as market reactions shift from emotional to rational, the "weaponization" of the global financial system becomes clear. The use of US dollar payment infrastructure as a geopolitical tool—as seen in 2022 when Russia was cut off from SWIFT—pushes some countries to accelerate the search for non-sovereign settlement alternatives.
In the third stage, Iran’s decision to accept Bitcoin for passage fees through the Strait of Hormuz marks the first time a sovereign nation has used Bitcoin for large-scale commodity-related settlements. This real-world application directly catalyzes a revaluation of the narrative: "Bitcoin as an international settlement currency."
Data and Structural Analysis: A 12% vs. -10% Divergence
Here are the key asset performance comparisons from the Bitwise report, covering the period from the close on February 27, 2026, to April 10, 2026:
| Asset Class | Price Change | Direction |
|---|---|---|
| Bitcoin | Up about 12% | Positive |
| S&P 500 Index | Down about 1% | Negative |
| Gold | Down about 10% | Negative |
Performance of Bitcoin, gold, and stocks during the 2026 Iran conflict. Source: Bitwise
The standout anomaly in this data: Under traditional theory, Bitcoin is considered a high-beta risk asset and should be the first to fall in a risk-off, geopolitically driven environment—which is exactly what happened at the onset of the conflict. However, over the following month, not only did Bitcoin recover all its losses, it posted significant gains, while gold fell about 10%.
This divergence points to a crucial question: Is Bitcoin’s risk profile undergoing a structural shift? Notably, this isn’t an isolated phenomenon. According to data cited by ChainCatcher, since the outbreak of conflict, Bitcoin has climbed 16.76% while silver has dropped 15.58%. The collective weakness in precious metals—longstanding safe havens—contrasted with Bitcoin’s resilience, further reinforces the credibility of this narrative divergence.
Beyond price action, on-chain data offers valuable insights. Since the start of 2026, Bitcoin’s average daily transaction count has jumped 62%, reaching 765,130 on April 5—a 17-month high, comparable to levels seen during Bitcoin’s first break above $100,000 in the 2024 US presidential election cycle. Glassnode reports that Bitcoin’s total network fees rose 4% over the past week, indicating rising on-chain demand.
Meanwhile, exchange Bitcoin reserves continue to fall. Global exchange reserves have dropped to around 2,690,000 BTC, the lowest since early 2023. Amid heightened geopolitical uncertainty, large amounts of Bitcoin are moving to cold storage. The 30-day average net inflow to exchanges remains negative, showing holders prefer long-term storage over short-term selling.
The resonance between on-chain data and price trends suggests that Bitcoin’s rally isn’t purely speculative—it’s accompanied by genuine network usage growth and supply contraction.
Three Narratives and Bitwise’s "Dual Bet" Thesis
Market interpretations of Bitcoin’s performance during this conflict fall into three main frameworks:
Geopolitics Are Irrelevant to Bitcoin
This view holds that Bitcoin has little correlation with global geopolitical events, and its price is driven mainly by internal factors (halving cycles, on-chain supply and demand, regulatory changes, etc.). Bitcoin’s rally during the Middle East conflict is seen as coincidental and unrelated to the conflict itself.
War-Induced Money Printing
According to this narrative, geopolitical conflict typically leads to fiscal expansion and monetary easing, which devalues fiat currencies and boosts the price of scarce assets like Bitcoin over the long term. Here, Bitcoin’s rally is attributed to expectations of future monetary policy, not the conflict per se.
Financial System Fragmentation Thesis
Bitwise decisively rejects the first two explanations. As Hougan writes in the memo, "Both views are wrong." Bitwise argues that Bitcoin’s strength stems directly from the structural fragmentation in the global financial system exposed by the conflict—when dollar-based payment infrastructure can be "weaponized" at any time, demand for depoliticized, non-sovereign settlement assets naturally rises.
Bitwise’s "Dual Bet" Framework
Bitwise sees holding Bitcoin as a "two-for-one" dual bet:
Digital Gold Narrative
Bitcoin is challenging gold’s dominance in the global store-of-value market. Bitwise estimates the global store-of-value market at around $38 trillion. If Bitcoin captures roughly 17% of that, its price could reach about $1 million. This logic has been widely discussed and partially priced in over the past two years.
International Settlement Currency Narrative
Bitcoin could serve as a currency for international trade settlements. Bitwise likens this to an "out-of-the-money call option"—its value rises as adoption probability and global volatility increase. Hougan notes, "If Bitcoin sees broader use in international settlements, that option pays off."
Until now, this second narrative was seen as remote. But after Russia was removed from SWIFT in 2022, the share of yuan settlements in China-Russia trade jumped from under 2% to nearly 40%, clearly showing how financial sanctions can accelerate the creation of alternative payment channels. "Countries are becoming less willing to use the dollar for political reasons," Hougan says. "This creates demand for politically neutral alternatives like Bitcoin."
Industry Impact Analysis
Bitcoin’s Asset Classification Faces Overhaul
Traditionally, Bitcoin has been grouped with "risk assets" or "high-beta tech assets." Its sharp divergence from gold—a traditional safe haven—during this conflict (up about 12% vs. gold’s 10% drop) is challenging that classification.
If Bitcoin continues to show negative or independent correlation with gold and traditional risk sentiment in future geopolitical events, institutional portfolio models will need to adapt. This could shift Bitcoin’s role from a "high-volatility alternative" to a "geopolitical hedge."
Non-Sovereign Settlement Accelerates
Iran’s acceptance of Bitcoin for passage fees through the Strait of Hormuz, while still in its early stages, marks the transition of Bitcoin’s settlement currency narrative from theoretical to real-world validation. Previously, the lack of sovereign-level adoption led markets to discount this possibility.
On a broader scale, the international monetary system is undergoing structural change. China’s Cross-Border Interbank Payment System (CIPS) now covers over 190 countries and regions, and BRICS nations are advancing digital currency interconnectivity. As a digitally native asset independent of any national sovereignty, Bitcoin occupies a unique position in this multipolar payments landscape.
Valuation Frameworks and the $1 Million Benchmark
The most forward-looking aspect of the Bitwise report is its recommendation to overhaul valuation frameworks. If Bitcoin captures both global store-of-value demand and international settlement flows, its long-term price may be systematically underestimated. The report shifts $1 million from an "upside target" to a "potential baseline."
This adjustment is grounded in the idea that traditional Bitcoin valuation models focus mainly on store-of-value market share. Once the settlement currency narrative is priced in, Bitcoin’s addressable market expands significantly. In options terminology, both Bitcoin’s "implied volatility" and "exercise probability" rise, increasing its embedded option value.
Conclusion
The brilliance of "chaos is a ladder" lies in its dual capture of geopolitical conflict’s effects—destructive for the old system, opportunistic for alternatives. Bitwise’s report isn’t just a bullish call; it’s a sober analysis of structural fissures in the global financial system.
For years, the narrative of Bitcoin as a settlement currency was seen as an "out-of-the-money option"—theoretically valuable, but practically out of reach. The introduction of Bitcoin passage fees in the Strait of Hormuz, regardless of eventual impact, has brought this narrative to the brink of real-world validation. As the dollar’s share of global reserves continues to fall, alternative payment channels accelerate, and sovereign nations openly experiment with non-dollar settlement, Bitcoin’s role as a non-sovereign, neutral asset is undergoing a historic revaluation.
As of April 15, 2026, Bitcoin’s price stands at $74,234.1, with a market cap of $1.33 trillion and a market dominance of 55.27%. In the coming months, the evolution of the Middle East situation, the implementation of Iran’s Bitcoin fee plan, and whether other countries follow suit will be key factors in testing the thesis that "chaos is a ladder."
